820774--1/14/2008--ASHWORTH

related topics

{customer, product, revenue}

{condition, economic, financial}

{debt, indebtedness, cash}

{operation, international, foreign}

{regulation, government, change}

{financial, litigation, operation}

{product, market, service}

{cost, operation, labor}

{property, intellectual, protect}

{provision, law, control}

If our embroidery and distribution center fails to operate as anticipated, the Company could incur additional expense. Failure to determine adequate inventory levels may result in decreased operating margins and harm our business. Failure to meet certain performance requirements could cause the Company to lose its exclusive licensing agreement with Callaway Golf. Changes in the retail industry could cause a decrease in the number of retail stores in which our products are carried. Sales of our product are dependent on the economy, popularity of golf, and weather conditions. Development of fashions or styles that are not well received would negatively impact our revenues and net profits. Poor sell-through of the Company s products could cause reduced revenues and net profit. Our international sourcing involves inherent risks which could result in harm to our business. Contractors may be unable to deliver the Company s products if necessary raw materials are not available. Failure of our contractors to comply with labor laws and codes of conduct followed by the Company could disrupt our shipments and damage our reputation. Currency exchange rate fluctuations could result in higher costs and decreased margins. The Company s international operations involve inherent risk which could result in harm to our business. The Company may be adversely affected by the financial health of our customers. The Company is subject to periodic litigation which could result in unexpected expense of time and resources. Failure to adequately protect our intellectual property rights could adversely affect our business. Failure to retain and continue to obtain high quality endorsers of our products could harm our business. Our business is affected by seasonality and consumer discretionary spending, which could result in fluctuations in our operating results. Our substantial indebtedness could adversely affect our operations, financial condition and the ability to enter into certain change of control transactions. If our cash from operations is not sufficient to meet our expenses and obligations under the Credit Facility, we may be required to refinance our debt, sell assets, borrow additional money or raise equity. Restrictive covenants in the Credit Facility may restrict our operational flexibility. Our ability to comply with these restrictions depends on many factors beyond our control. The Credit Facility is subject to variable rates of interest, which could negatively impact the Company s net profitability. Anti-takeover devices may prevent a sale, or changes in the management, of the Company.

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820774--1/14/2008--ASHWORTH_INC